Oil prices firm

TOKYO. — Oil prices clung to this month's high yesterday after Iraqi forces seized the oil-rich city of Kirkuk from largely autonomous Kurdish fighters while Asian shares held firm on optimism about upcoming earnings.

Short-term US bond yields and interest rates jumped after a report US President Donald Trump favoured Stanford economist John Taylor to head the Federal Reserve.

“There is no major country that is facing economic troubles. We have a decent global growth, upbeat corporate sentiment and no inflation. Stocks are the obvious choice in this environment,” said Arihiro Nagata, head of derivatives at SMBC Nikko Securities.

Oil prices held near their highest levels in almost three weeks after Iraqi government forces captured the major Kurdish-held oil city of Kirkuk in a response to a Kurdish independence referendum, raising worries about oil supply.

As Iraqi forces advanced, Kurdish operators briefly shut some 350 000 barrels per day of oil output at two large Kirkuk fields, citing security concerns, oil ministry sources on both sides said.

Although production resumed shortly thereafter, concerns about supply disruptions and further escalations in the confrontation between Baghdad and the Kurds kept investors on edge.

US crude traded at $51,78 a barrel, down slightly on the day, after having hit a high of $52,37 on Monday, a rise of 6,7 percent from its three-week low of $49,10 hit on October 6.

Brent crude fetched $57,84 per barrel, flat on the day after having risen to as high as $58,47 on Monday.